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2018 (9) TMI 1579 - HC - Central ExciseValidity of Rule 96ZO of the Central Excise Rules, 1994 - Imposition of penalty - Whether the Tribunal was correct in holding that Rule 96ZO of the Central Excise Rules, 1994 as ultra vires and holding that the penalty is not imposable on respondent, when the Rule 96ZO has been formulated under Section 37 of the Central Excise Act, 1044 vide N/N. 33/97-CE(NT) dated 01.08.1997, when as per the Section 37(4)(a) of the Central Excise Act, the Government of India has the powers to make the Rules with regard to penalty of an amount equivalent to the duty involved? Held that:- The issue for consideration in the present appeal was decided by the Hon'ble the Apex Court in the matter of Shree Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise and others [2015 (11) TMI 1172 - SUPREME COURT], where it was held that A penalty can only be levied by authority of statutory law, and Section 37 of the Act, does not expressly authorize the Government to levy penalty higher than ₹ 5,000/-. This further shows that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make rules 96ZO, 96 ZP and 96 ZQ without authority of law. We, therefore, uphold the contention of the assessees in all these cases and strike down rules 96ZO, 96 ZP and 96 ZQ insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act. Appeal dismissed - decided against Revenue.
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